Corporations and private equity firms have, over the years, created a number of different types of transactions and resulting structures to meet their strategic needs. We've seen carveouts, spinouts, joint ventures, special purpose vehicles, etc. Each is meant to get the right kind of resourses to the right kind of projects within the context of the larger organizational goals.

Many times, that means pushing assets away from the company for various reasons with the option for a buyback or something. This happens many times in the pharmaceutical industry in the case of "orphan drugs"--compounds that have been developed, but never really marketed or even fully tested. Its more often a result of lack or organizational bandwidth, either in sales channels, or simply strategic attention span than it is for lack of resourses. There are some private equity firms that will buy these compounds, match them with other similar products in a sales channel--other orphan drugs--and try to revive them. Often, the seller retains some right to the deal in the form of equity or some kind of call facility.

Lately, I've been wondering if this could work for web services. There are a lot of "orphan" web properties out there that don't seem to fit in a company's strategic vision anymore that could be significantly improved with some "startup" type focus, ambition, and creativity. VCs approach this situation by seeding a competitive service and climbing uphill to develop a brand and a userbase from scratch.

What if VCs could take stakes in existing services, infuse them with some entreprenuerial talent, and reinvigorate them, giving the owner the chance to buy them out if their operation was successful?

Take Evite, for example. Everyone knows Evite and thinks of it first when planning something. Yet, the service hasn't changed at all in like five years. Clearly that's an orphan property. Perhaps IAC can't seem to fit it somewhere, so they're not focused on it. Yet, there are a lot of entrepreneurs thinking and building around the calendaring and event space. They've got an uphill climb to reach the kind of usage that Evite has--but yet Evite doesn't seem to be taking the best advantage of that usage either. I think it would be interesting to go to IAC with an offer to take a synthetic position in that property, turn it around, and then have IAC buy you out after you've done your job. Its a little bit like when consultants take options as part of their compensation, but in this case the equity would have to be tied to some agreed upon metric beforehand.

The target web services would benefit from some fresh ideas and new perspective... Perhaps even an expertise not present within the company at the moment. Maybe all of the really thoughtful event people have left IAC because Evite has languished as a property. I don't know, but I'm quite sure Evite isn't the only one that fits this profile. Up until recently, Citysearch was in this same boat at AOL, but they found the resources and made it a priority to turn it around on their own.

Being able to work with an existing property would have its pros and cons for an entrepreneurial management team. On one hand, they would benefit from an existing userbase, synergies with other properties within the company, and better resources. On the other hand, culture might be an issue. A culture that is resistant to change might be the reason why the service languished in the first place. There's something to be said for being able to create a culture from scratch.

Working with a small set of trusted VCs. However, might prove very beneficial and have unanticipated benefits. When a company opens the kimono to a vc, the vc becomes better informed about where the current technology leaders are going to try to lead the market. They become better able to fund accordingly, creating the systems that spur innovation. They also become better partners, since they have their ear to the ground and may be able to find properties that fit with the company's strategic vision.

Does anyone else have any ideas about a languishing web property or service that could use some startup style ingenuity better able to take advatage of the platform its on?